India's agrochemical industry is expected to grow 8-10 percent by 2025, according to data by the Federation of Indian Chambers of Commerce & Industry (FICCI).

The industry has a huge unrealized potential due to the low level of agrochemical consumption. India's per capita consumption is 0.6 kg/hectare as against China's 13.1 kg/hectare.

India's agrochemical market forms 15 percent of the global market. The global agrochemical’s value chain comprises raw material suppliers who supply both petrochemical derivatives as well as natural feedstock.

Presently, India is the fourth-largest producer of agrochemicals after the US, Japan, and China. Its key segments include insecticides, fungicides, herbicides, bio-pesticides, and others.

In FY20, India's market was valued at Rs 40,000 crore, with domestic consumption being Rs 20,000 crores. The sector is highly impacted by the domestic agriculture sector and exports.

"India's strength lies in being a low-cost manufacturer, with its established presence in generic and skilled labour getting it in good stead," a Crisil report had said in December 2020.

As the area under cultivation increases due to good monsoon and water levels, the sector prospers. In FY20, about 65 percent of agrochemicals demand was derived from a good summer season. With strong exports from countries like the United States and Latin America, the sector was able to recover from the COVID-19 woes.

Following this, the Pesticides Manufacturers and Formulators Association of India (PMFAI) in March 2021 had urged the Centre to extend policy support to the sector to enable a two-gold growth of the market.

“If the government extends policy and procedural support, the industry can grow to reach the market size of Rs 75,000 crore within 4-5 years with a major increase in exports,” he said.

The Indian agrochemical market is highly fragmented with fierce competition from a large number of organised players. By market share, Bayer CropScience, BASF, and Rallis India are some of the top companies.

On a year-to-date basis, the market has witnessed a strong bullish trend. In the past month, Insecticides India has surged over 35 percent and nearly 60 percent YTD.

On Monday, the shares of India Pesticides listed at Rs 360 per share — a premium of 21.63 percent. Its Rs 800 crore IPO was subscribed 29 times during June 23-25, 2021.

In the special segment ‘Trendspotting’, CNBC-TV18’s Sonal Bhutra talk about the opportunities available for agrochemical players in India.

Watch the video for more.

(Edited by : Yashi Gupta)